Nearly 300 homes are being built on an industrial estate that was already eligible for redevelopment 10 years ago.
Durham County Council is set to build 282 homes on the site on Stephenson Road, between Peterlee and Horden, after plans were approved on Friday.
A building permit was initially issued for 390 homes on the site in 2014, but progress on the redevelopment stalled.
Conservative councillor Patricia Jopling said it was an “absolute pleasure” that the council was transforming something “so ugly” into beautiful homes.
According to the Local Democracy Reporting Service, local residents complained that the area had become a hotbed of antisocial behaviour and crime.
Susan McDonell, The North East Party councillor for Peterlee West, said: “Residents are facing increasing anti-social behaviour such as illegal waste dumping, vandalism and arson. There are also undesirables using the area for drug use, gang meetings and shortcuts, tearing around on their 4x4s and quad bikes.
“There is an urgent need for affordable, good quality housing in this area.”
A second building application is expected later this year, describing the appearance and layout of the new district.
A project developer is then invited to build the district.
According to the council, funding is already available from Homes England for the redevelopment of the vacant site.
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